]]>The year was 1999. Just when it seemed everyone who needed one was wearing an alphanumeric pager on their belt, BlackBerry changed the game with its first portable email device. Three short years later, BlackBerry added voice capabilities, turning its data-centric devices into early smartphones that helped show the world the power of mobile computing while spawning a highly profitable enterprise services group.

How could a company so ahead of the smartphone and mobile broadband curve fail to maintain its place in the market in less than a decade and be prepared to sell itself for just $4.7 billion in 2013, after being valued at over $40 billion in 2007?

There are a number of reasons, but to understand them, you have to step back in time to get the whole story.

Helping to create an industry

Getting email or surfing the web on a device that fits in your pocket is pretty commonplace now. In the mid-1990s though, cell phones were clunky devices that couldn’t hold a charge for more than a few hours and were one-trick ponies: All they did was make or receive voice calls. Small pagers became handy, particularly for the growing IT industry.

Numeric pagers were just the start though. Then called Research In Motion, BlackBerry saw the potential of both receiving and sending text as well. The value was significant — instead of being notified of a phone number to call back, you could receive actionable information. By 1996, BlackBerry had a device on the market that was a two-way pager, sending data over the internet and offering both delivery and read receipts; now a standard for most messaging services.

These new devices also included many hardware features that appeared in many later products from others: like thumb-based keyboards and trackwheels for scrolling through menus and messages. The company also created its BlackBerry Enterprise Service (BES) to help securely deliver mail and messages.

Data-centric messaging machines were all the rage for a few years and during this time cell phones went from a luxury item to a device that could be obtained by a broad audience. Handsets also got smaller while battery life improved. All of this happened at just the right time for BlackBerry, which began to merge its two-way messenger devices with cell phones in 2002: BlackBerry’s smartphone was born.

BlackBerry Timeline

1984 – Engineering students Mike Lazaridis and Douglas Fregin co-found Research in Motion

2013 August – BlackBerry announces that it is open to “possible transactions,” including a potential sale of the company

2013 September – BlackBerry announces that it will cut 40 percent of its workforce – roughly 4,500 jobs

2013 September – BlackBerry signs letter of intent to be acquired by Fairfax Financial Holdings for $4.7 billion

The good times keep getting better

The next several years saw BlackBerry grow its lucrative BES subscriber base from 534,000 in 2003 to nearly 5 million in 2006. The company made smart decisions to improve its handsets with color displays, and some early models that included a Wi-Fi or a Bluetooth radio.

Helping to make handsets even smaller was the introduction of SureType: A predictive text method that also allowed keyboards to have half as many keys. Each individual hardware key represented two different characters and SureType helped the handset figure out the typed words.

At this time, BlackBerry saw promise outside of enterprises and began to offer smartphones attractive to consumers. These phones included a built-in chat client, media player software, expanded memory and a change from a trackwheel to a trackball with the Pearl handset. The biggest draw over competing handsets though was the famous BlackBerry keyboard, which made messaging, email and chat easy to use. First the Pearl, and later the Curve, become hot handsets that consumers wanted.

Of course, BlackBerry wasn’t the only choice for a smartphone: Nokia and Palm — remember them? — were in the mix as well. Like BlackBerry, Palm changed with the industry, first offering personal digital assistants and later bringing its PalmOS software to handsets. And Nokia was in its prime, leading the smartphone market worldwide: A spot it would hold until a market disruption would occur.

The game changed in 2007

By 2007 more than 1 of every 3 new smartphone purchases in the U.S. was a BlackBerry. Worldwide the company was second only to Nokia in the smartphone business, which was just gathering steam. BlackBerry’s market share would continue to grow but peaked in 2009 only to spiral downward over the next four years. What happened? Apple.

Apple’s iPhone changed the game for BlackBerry and everyone else trying to make smartphones. Yes, consumers still wanted their connected features, but interacting with virtual objects through a touchscreen was something BlackBerry didn’t offer, and the iPhone’s Safari web browser was like nothing the early smartphone market had seen. And in 2008, when Apple announced support for third-party apps its iPhone sales growth only accelerated. Simply put, BlackBerry had nothing comparable to offer and wouldn’t for years.

But it wasn’t just the changing market that began BlackBerry’s downfall; it was the dismissal of the idea that the market was changing. BlackBerry’s leadership never took Apple’s iPhone as a serious threat to business. At least not until it was too late.

“The recent launch of Apple’s iPhone does not pose a threat to Research In Motion Ltd.’s consumer-geared BlackBerry Pearl and simply marks the entry of yet another competitor into the smartphone market.”

BlackBerry’s responses to the iPhone: A bad Storm and a dim Torch

First: that famous hardware keyboard that BlackBerrys were known for was gone. In its place was a horribly implemented touch-based keyboard. The ease of text entry, long a staple of BlackBerry devices, was missing. Second: The operating system was improved for touch input but still not optimized for it. BlackBerry overlooked Apple’s approach of creating a symbiotic hardware and software relationship, instead thinking it could just slap a touchscreen on a BlackBerry and continue to enjoy strong sales.

Another example of BlackBerry playing follow the leader — first to Apple’s iOS and later to Google’s Android — was BlackBerry App World. This smartphone app store opened in April 2009, nearly a year after Apple’s own store. Besides being late to the app game the store opened with just a few hundred apps. It was deemed “good enough” in our review.

But time would prove that it wasn’t quite good enough at all. Nor was the Storm. So in 2010, BlackBerry launched the Torch; a hybrid device with both a touchscreen and a hardware keyboard. In my review, I called it an evolution, not a revolution. While it offered a better experience than prior models thanks largely to better software, it wouldn’t compel current iPhone or Android device owners to make a switch. New software would be needed to rival or exceed the experiences offered on competing devices.

QNX will save us all

If the Storm and Torch were strikes one and two, BlackBerry’s entire QNX strategy would be strike three and seal the company’s fate. Knowing that its aging BlackBerry OS was beyond saving, BlackBerry bought QNX Software Solutions from Harman International in April of 2010. The idea was to integrate QNX software into BlackBerry hardware to create a more compelilng software experience.

It was a sound idea but the implementation proved a challenge. While BlackBerry was working on QNX for its devices, it rolled out BlackBerry 7 software and new phones to run it on. This turned out to be a visible stop-gap measure because the new handsets would be incompatible with the new QNX platform. That hurt not just consumer adoption but developer interest as well during the transition.

The device actually worked well for what it could do but it was what the tablet couldn’t do that was a key issue: It came without an email client. Due to technical challenges with security, BlackBerry required the PlayBook to use a BlackBerry phone for email; another “strategy” that wouldn’t help expand BlackBerry’s customer base. The device launched with few apps and many that were available were simply Android apps running in an emulator.

PlayBook sales never took off and by the end of 2011 BlackBerry still didn’t have QNX-powered handsets on the market. At that time its U.S. market share had dropped to 16 percent of all smartphones sold; nearly half that of both iOS and Android devices. Tablet sales were on the rise for these two competing platforms as well; yet not even $300 price cuts could move BlackBerry Playbooks.

A lack of new products in 2012 essentially wasted another year for BlackBerry’s comeback, which by this point was admittedly a long shot. No major products were launched and the new BlackBerry 10 software — based on QNX — didn’t arrive in the second half of 2012. Instead, the company announced in June 2012 a BlackBerry 10 delay until 2013 and another 5,000 job cuts. The Playbook tablet did see a new version of software, but aside from that, BlackBerry delivered no innovation during the year.

The innovation arrived in late January, 2013 in the form of the BlackBerry Z10. Was it better than the company’s prior all-touchscreen efforts? Yes, by far. But it still had some quirks and a number of gestures that could take customers time to get used to. And the mobile app gap had only widened. After just two days with the device I wrote the following:

“The lack of apps [on BB 10] that I use on other devices is concerning. BlackBerry has commitments for Skype, Amazon Kindle and others, but they’re not there. Nor is Netflix, any recognizable top-tier games, or my offline reading platforms. Google Talk is there, but no Google Voice; a must for me on any phone. YouTube is the HTML 5 mobile site wrapped up.”

The hardware was solid, the software was improved, but the overall experience was lacking. I felt deja vu from the Storm launch: existing BlackBerry users might be happy but the new phone wouldn’t grow BlackBerry’s user base. The company followed up with the Q10, Q5 and Z30 throughout the year, but its overall market share kept shrinking. There would be no comeback for BlackBerry’s hardware business.

What happens to the company after the deal is up to Fairfax, but it’s not likely going to entail the selling of consumer handsets. Instead, the new owner would likely sell the hardware business off if possible and focus more on the lucrative BlackBerry services business. Licensing of BlackBerry’s many patents is another likely possibility.

In the end, the smartphone market was BlackBerry’s to lose. And it did. By dismissing new competition, the company became complacent and sluggish. Instead of reacting faster and more intensely, BlackBerry faltered with a few quick-fixes that failed. Jumping into the tablet market with an unfinished product further hurt the company’s outlook, and taking too long to deliver the real challenger to iOS and Android — namely, BlackBerry 10 — made customers lose faith that BlackBerry could deliver a compelling product.

The market couldn’t wait, so it moved on. And so BlackBerry may not be a part of the industry it helped create because the comeback it promised never arrived.

Could BlackBerry have avoided its fate? Hindsight is always 20-20, so knowing how the last few years played out provides us with information that BlackBerry didn’t have. Perhaps it should have seen the disruption of iOS and Android sooner, however.

Instead, the company took an almost arrogant approach towards its competition and clearly didn’t have a long-term plan to combat it. Each time BlackBerry adjusted to the market, it would still be two steps behind iOS and Android, causing more churn with stopgaps such as BlackBerry 7 and handsets that wouldn’t ever run the company’s future software. All in all, it was a costly lesson for BlackBerry, the once and not future king of smartphones.

]]>Research In Motion, the perennial also-ran of the smartphone world, took a bold step towards reversing its declining fortunes on Wednesday, with the launch of its new BlackBerry 10 line of phones — and a surprising re-branding of the company that will see it become BlackBerry instead of RIM. Amid the deluge of live-blogs (including our own, from Kevin Tofel in New York) and embargoed reviews, the reaction to the launch included some expressions of grudging respect for its new products, but also a lot of “where was this two years ago” responses.

On the positive side, a number of those watching either live or on a livestream said that BlackBerry had caught up and possibly even surpassed other platforms like Apple’s iOS, Android and Windows 8, and that the company had a fighting chance of remaining relevant:

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At least one enthusiastic BlackBerry supporter even went so far as to say that Steve Jobs would be jealous of what the company had announced:

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But there were just as many — or more — responses that criticized BlackBerry for being late to the party, and for only now coming up with the kinds of features and apps that iPhone and even Android have had for some time. CNN Money said that the Z10 was the kind of phone BlackBerry “should have made years ago” and that while there were some good ideas in it, “Everything still feels a generation behind.”

[tweet https://twitter.com/omarelakkad/status/296648566435352576]

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In his review, Walt Mossberg of the Wall Street Journal and All Things Digital said that the company had “reinvented itself” with its new devices, but also called it a “work in progress” and noted that the new phones lacked some of the features — and many of the apps — that users of other platforms were used to:

“Overall, it worked fine in my tests, but I found it a work in progress. I liked some things a lot, including the way RIM has designed its new virtual keyboard and camera, and the way it gathers all your messages into a single Hub. But it will launch with just a fraction of the apps available from its competitors, and is missing some very popular titles…. and there are other missing or lagging features.”

One of the early awkward notes in the presentation — at least for some attendees and observers — was a public thank-you from CEO Thorsten Heins to former co-CEOs Jim Balsillie and Mike Lazaridis:

[tweet https://twitter.com/ohnorosco/status/296640321419362304]

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The renaming of the company sparked some positive comments, but also drew a lot of snarky responses about how no one really knew what Research In Motion stood for anyway — and also a comment about how much pressure the name change puts on the company to succeed with the BlackBerry revamp:

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Then it was on to the details of the two handsets, the Z10 and the Q10 — the former a touchscreen model and the latter featuring a QWERTY keyboard, which has been BlackBerry’s key differentiator from other smartphones for some time. After some talk about the hardware design, the company went into details about what apps would be available, and there was some optimism but also much skepticism:

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In a mammoth review of the touch-screen Z10, Joshua Topolsky of The Verge said that there were many things to like about it, but lots of things not to like as well — and the bottom line seemed to be a definite “meh”:

“The Z10 is a good smartphone. Frankly, it’s a better smartphone than I expected from RIM at this stage in the game. It does everything a modern phone should do, usually without hesitation. It doesn’t do everything perfectly, but it does many things — most things — reasonably well. The problem with the Z10 is that it doesn’t necessarily do anything better than any of its competition.”

Towards the end of the presentation, the BlackBerry CEO announced that singer Alicia Keys would be the company’s new “global creative director,” and like most of the other announcements by the company at the launch, this also drew a lot of snark:

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So does the BlackBerry 10 launch mark the rebirth of a revitalized company, ready to take on Apple, Android and Windows for smartphone supremacy? It’s probably safe to say that view would be in the minority — and the most common response was a virtual shrug:

[tweet https://twitter.com/TheRomit/status/296654260047843328]

It’s still early days, of course, but that’s not a great harbinger of success for the company, which has so much riding on a recovery — and perhaps even more important, the stock market seemed to be shrugging its shoulders (or even frowning) at the announcement as well:

In his review of the Z10, New York Times technology writer David Pogue apologized for saying RIM was dead before, but still wound up sitting on the fence about whether the device would be enough to save the company:

“These days, excellence in a smartphone isn’t enough. Microsoft’s phone is terrific, too, and hardly anyone will touch it. So then: Is the delightful BlackBerry Z10 enough to save its company? Honestly? It could go either way. But this much is clear: BlackBerry is no longer an incompetent mess — and its doom is no longer assured.”

]]>Research in Motion executives delivered what was probably the most important product presentation in the company’s history Wednesday. After years of struggling in the wake of Apple’s iPhone launch to come up with an answer to a product that changed the world, RIM is finally ready to unveil its BlackBerry 10 handsets, the first RIM devices to use a modernized mobile operating system.

Research in Motion will now be known simply as BlackBerry, according to CEO Thorsten Heins.

Two BlackBerry 10 handsets were shown off: the touchscreen Z10 and the QWERTY keyboard Q10

Some interesting features such as BlackBerry Hub, Story Maker, and others were shown off. 70,000 apps will be available.

The Wall Street Journal is reporting that the phones won’t be available until mid-March in the U.S. They’ll be available in other countries much sooner, with the U.K. able to purchase the devices tomorrow.

]]>The year was 1999 when Research In Motion first unveiled its initial BlackBerry email pager, the beginning of a strong product brand that continues to this day. In that time, the ubiquitous BlackBerry has grown beyond a simple email machine to capable smartphones in 2003, gathering a cult-like following of “crackberry” users.

As quickly as RIM’s BlackBerry rose to the top in the first half of the last decade, it just as quickly fell behind the touchscreen smartphone revolution started by Apple in 2007. Now, after several years of losing market share and stalling growth of its BlackBerry subscriber base, RIM is rebooting the product line this week with the debut of BlackBerry 10.

So why is this time different?

We’ll know more after Wednesday’s BB 10 launch in New York City, but hints of potential success for RIM are popping up all over the web. First up is the hardware, expected to be two initial handsets; one with a physical keyboard and one, dubbed the Z10, without. From the various leaked images and video of what’s likely a developer phone model in use, they appear perfectly capable and comparable in performance to other high-end smartphones available today.

What about the operating system? Considering that RIM originally planned to have a new platform on phones by early 2012, it has had an extra year to work on BB 10. That year proved tumultuous with the co-CEOs stepping down, market share dropping, pleas to developers to stay the course and barely any growth in BlackBerry subscribers. From the little bit of BB 10 I’ve seen so far, however, the wait may be worth it.

Expect to hear much about BlackBerry Flow at the launch event: This is RIM’s tightly integrated method of quickly navigating through the operating system in a consistent manner. BlackBerry Hub is the centralized communications center while the BlackBerry software keyboard should provide for fast, accurate entry.

There’s more to smartphone success than hardware and the OS, however. It seems like RIM has also learned the lesson that mobile apps and content deals are also important. On the app side, the company has put enormous effort into courting developers, even poking fun at itself in a music video. (Hear what RIM’s Alec Saunders has to say about that in our podcast interview.)

The most likely outcome

What are the odds that Research In Motion has a hit with the new BlackBerry 10 devices? I’ll have a better idea when I attend the launch event, of course — and I’ll be live-blogging from there — but based on the limited information I have so far, RIM should at least be staying in the smartphone game.

As I’ve said to many over the past few months, the new devices should appeal to current BlackBerry owners. My unanswered question now is: Will there be enough to sway people away from iOS and Android phones? Until we know more, I think it’s a safe bet that RIM keeps its current user-base happy and possibly steals some market share from its peers.

Either way, if RIM delivers what I expect in BB 10, it stays relevant in a market where nearly 6 billion people don’t yet have a smartphone. There’s much growth to be found yet, even if BB 10 doesn’t unseat the current smartphone incumbents. But even with the right recipe and ingredients, there’s no guarantees for RIM. Challenges still loom for the company as whole and maintaining a sliver of market share may not be enough for the long road ahead.

]]>Research In Motion isn’t out of the woods yet, but at least one obstacle to the success of its new BlackBerry 10 phones is out of the way. This week, all four major U.S. carriers said they would sell RIM’s new handsets this year. Details of product launches aren’t yet available as the actual new devices have not even been announced yet; that happens on Jan. 30 when RIM will share information on its next generation of devices.

The world is certainly bigger than just the U.S. but this development is still a largely positive one for RIM. We’ve seen in the past the good products without the proper marketing and support from carriers have largely failed. Palm’s exclusive deal to sell the Palm Pre only on Sprint initially, is a good example, although there were obviously other issues at play. Look at the original Motorola Droid, on the other hand: Verizon pumped millions into promoting it and the phone kicked off a string of Droid successes for Motorola and the Android market at large.

That’s exactly the kind of success RIM needs with its BlackBerry 10 handsets. The company was ill-prepared for the transition to touchscreen hardware and interfaces that started in 2007 and has generally been losing customers and market share ever since. A feeble attempt to graft touch onto a traditional BlackBerry in 2010 — remember the Torch? — wasn’t the answer.

RIM’s best response is sure to be the completely new BlackBerry 10 system, which is looking good so far. Clearly, it’s good enough for the carriers to show interest, and in the U.S., the carriers are still the kingmakers … unless your name is Apple, that is.

]]>As the holiday nears and the year — not the world — ends, it’s a good time to check my mobile predictions from 12 months ago. With the pace of change accelerating, it’s becoming quite difficult to prognosticate even six months down the road in some circumstances. But before New Year’s Eve, I’ll check my crystal ball to see what to expect 2013 will bring to smartphones, tablets and mobile technology in general. Until then, let’s see how I did over this past year.

Wearable computing becomes the next mobile frontier. We’ve seen some strides forward in this area, but it’s still a young market. I suggested that we’d see more of these devices and we did: smart watches, health monitoring gadgets, and Google’s Project Glass, for example. Wearable computing isn’t mainstream just yet and probably won’t be for some time.

We’ll remotely connect to our smart homes. I predicted two specifics here. The first, more companies trying to put sensors and services into homes, has held up. Automation services and products are coming from ISPs, networking companies and legacy security businesses. The second had to do with more DIY solutions being used by consumers but I’ve seen little evidence of that.

Windows Phone usage grows, but slower than expected. I guess it depends on your expectations. Windows Phone usage has grown, but not as fast as some would like. I noted that Windows Phone wouldn’t have double-digit market share in 2012, which appears accurate. However, I expected Windows Phone market share to surpass that of BlackBerry at some point this year. It’s difficult to say, as neither Microsoft nor its partners have shared sales data, while this week RIM said it sold 6.9 million handsets in the most recent quarter. I’d estimate sales between the two platforms are close to even and it’s clear that RIM’s sales didn’t fall as fast I thought.

Windows tablets in 2012 will sell like Android tablets did in 2011. Android tablets had a rough start in 2011 just as Windows tablets have so far this year. I noted “Tablet choice for consumers next year will be iPad first, Android second and Windows third,” and that seems correct for now. Of course, it’s early for Windows tablets; I didn’t anticipate that Surface Pro and some other Windows 8 tablets wouldn’t appear until 2013.

Research In Motion will no longer exist as we know it today. There were some management shakeups, but otherwise, RIM is still alive and kicking. I was completely wrong when I said “By year-end, I suspect the company will be purchased, mainly for its patents, or will refocus as a services-oriented entity.” The very fact that BlackBerry 10 devices are expected on Jan. 30 suggests that RIM will live to fight another year.

Nokia uses Symbian as a backup plan (but doesn’t call it Symbian). It doesn’t appear that Nokia has a backup plan. There was talk of Android lately — something I suggested 2.5 years ago — but it’s too late for Nokia to enter the crowded Android market.

The patent wars worsen. This is difficult to quantify, but I see no evidence that they got any better. In fact, some HTC devices were held up from being sold early in the year due to potential patent infringement. The same happened to Samsung’s Galaxy Tab 10.1 and, for a short time, the Galaxy Nexus. I expected Apple and Samsung to settle for an undisclosed amount and that didn’t happen. Instead, Apple was awarded a preliminary sum of $1.05 billion, which could yet be modified.

Dual-core devices will outsell quad-core devices. I haven’t found any statistics on this, but I’m comfortable saying this one was accurate. Why? There are still relatively few quad-core chips: NVIDIA’s Tegra 3, a specific high-end Qualcomm Snapdragon S4, and one of Samsung’s Exynos, for example. Although some of the best-selling phones use one of these — international variants of the Galaxy S III and Note 2 come to mind — only a few flagship devices have quad-core processors. Think the Droid DNA, HTC One X, Microsoft Surface RT, and Nexus 4, for example. There are others, but amid the millions of mobile devices sold in 2012, relatively few had a quad-core chip. None of Apple’s handsets yet use a quad-core system-on-a-chip, for example, nor do any of the low- to mid-range devices that make up the bulk of the market.

Apple’s next iPhone will be the iPhone 4GS. I goofed on the name even though I was correct about the inclusion of LTE. I did not predict a larger iPhone at the time. Two years ago I suggested it would desired, but that doesn’t make the 2012 prediction correct.

There will be an iPad Pro available in 2012. Again, wrong on the name, but right on the product. I described this as a higher resolution device at the same price point. I also said that the iPad would see a price reduction as a result of the new device, and it did. As an early adopter of small slates, I surprisingly failed on the iPad mini, figuring a lower-priced iPad 2 would eliminate the chances of a smaller, less expensive iPad. I’m happy to be wrong on that as the iPad mini — another form factor I suggested would be useful back in early 2011 — is my most used mobile device today.

Google will split off Motorola not long after its purchase goes through. I said this because I thought Google wouldn’t be able to compete with its partners; clearly it feels it can. I’m still not sold on the idea of this working out long-term and yet even Microsoft is doing the same with its Surface computer line.

Android’s momentum will continue thanks to Android 4.0. I see no evidence proving this one wrong. In fact, by some estimates, Android has lengthened its market share lead over iOS and other mobile platforms in 2012. Part of that is due to sales of low-priced Android devices, of course. Yet by many accounts, Android as an operating system is now close to par with iOS, thanks largely to the improvements in Android 4.0.

Hybrid apps with HTML5 will be the norm. Wrong. And the biggest example of why this was wrong is Facebook, which left HTML5 behind in favor of native apps for different platforms. There are surely successful examples of HTML5 in a standalone or hybrid mode for mobile apps, but they’re not the norm.

Intel will announce that 2013 is the year it really gets into the mobile market. Intel actually took a mobile step forward in 2012 with an Atom-powered smartphone in the Razr i. For all intents and purposes though, 2012 was still dominated by ARM-powered devices, at least until the next generation of Intel chips arrive in phones and tablets. And that will be in … 2013, so I’d say this was pretty accurate.

We’ll see a smaller Kinect in 2012, with expectations that such technology fits in a mobile device the following year. My most off-the-wall prediction was probably the most wrong. Kinect still has tons of potential but it’s not yet smaller, nor does it fit in a phone or even a tablet. We did see more gesture-based solutions in 2012, so I wouldn’t count this technology out for traditional computing uses or for mobile devices, but this was as wrong as you get.

All in all, I didn’t do too badly. And as I noted early on, it’s becoming harder to predict the fast pace of change in mobiles. So instead of rushing my 2013 predictions, I’ll be thinking long and hard over the holiday to see if my crystal ball is still working or if it turned into a Magic 8-ball: “Reply hazy, try again.”

The timing of this cross-patent licensing agreement couldn’t come at a better time for either company. Amid relatively slow-growing sales of Lumia smartphones, Nokia’s bank account could use both the one-time payment as well as royalty revenue going forward. And Research In Motion is in no position to have its devices kept off the shelves: On Jan. 30, it plans to introduce the first BlackBerry handsets to use its new BlackBerry 10 platform; the first iteration of RIM software that appears can compete with Apple’s iOS and Google’s Android platforms.

Although the payment details are confidential, RIM shouldn’t have a problem transferring funds. Yesterday during its quarterly investor call, the company reported $2.9 billion in cash on hand. Of course, some of that is surely going to go into marketing the new BlackBerry 10 devices in order to generate sales.

]]>The smartphone industry is at an interesting point in time. In 2007, Apple’s iPhone practically invented — or re-invented, if you will — the current smartphone age with a full capacitive touchscreen and support for mobile apps. Google Android followed in 2008 and although it was slow to catch up, is relatively on par with iOS in terms of usability and app support.

Can Microsoft and RIM succeed where others have failed?

These incumbents — Apple and Google’s Android partners — account for 89.9 percent of smartphone sales as of the third quarter of 2012, per IDC. Some alternative platforms, such as Palm’s webOS and Nokia’s Maemo software, entered the market only to disappointingly disappear: webOS is now an open-source platform and Maemo became MeeGo, which Nokia abandoned when it chose to use Microsoft’s Windows Phone software. Windows Phone has been around for two years but has relatively little in the way of sales to show for it.

With Windows Phone 8, however, Microsoft now has its best chance for success. It appears that Research In Motion’s BlackBerry 10 system, which will be unveiled on Jan. 30, is RIM’s last-ditch effort at relevancy as well. I’ve used, and like using, Windows Phone 8 and I also like what I’ve seen from RIM as it has shared limited details of BlackBerry 10. But I’m unlikely to switch platforms now and based on the timing of these two products, I expect many current smartphone owners to avoid switching as well.

What can a new smartphone platform offer at this point?

There are a few reasons why I think this, with the first being the maturity of the current smartphone platforms. After five years in this current age, all the heavy lifting is done, meaning the biggest platform breakthroughs have already been made. Put another way: All of the recent incremental upgrades to iOS and Android are just that: incremental. The pace of change for a native smartphone operating system has slowed and the changes themselves are mainly small features or minor user interface tweaks.

Of course, it’s always nice to have more options. And in my opinion, some native smartphone features are actually better on Windows Phone than on Android or iOS.

The People hub in Windows Phone, for example, makes it easy to see all of your contacts, their social status, updates and photos. While the approach is sound, and perhaps even better than contact management on alternatives, one could always add Facebook sync to their phone for a similar experience. So the value of the People hub is diminished when making comparisons.

And while RIM employees I’ve spoken with tell me that the BlackBerry fan base is excited by BlackBerry 10, nobody at RIM answers me directly when I ask, “Yes, but what feature(s) will broaden the BlackBerry base?” which has been shrinking over time.

Consumers aren’t buying hardware, they’re investing in platforms

I’ve been saying this for months, if not years: The battle for smartphone dollars is only partially won or lost by the hardware itself. The longer a handset owner sticks with one platform, the more they invest in content and apps that only work with that platform. This lock-in cost — something I mused about over two years ago — is a potential barrier to switching. And for those who invested early in a platform, as much as four or five years, its highly unlikely a switch will occur. Who wants to re-buy premium apps, books, videos and other content?

Maybe there won’t be a third-horse in this race after all

Barring any major smartphone advances by Microsoft or RIM now, neither appears poised to become a third horse in smartphones, at least when it comes to smartphone switchers. Bad timing and prior consumer investment are sure to hold back both platforms, at least in areas where smartphone penetration has already reached the tipping point. Could either of these do well in other regions, however?

Yes, they can, but the upside appears limited in my opinion. Even in areas where the smartphone population is low, both platforms are competing against low-priced but still capable Android handsets or older, and less expensive, iPhone models. Even so, I think the idea of catering a low-cost device to first-time smartphone buyers — exactly what Nokia is doing with its Lumia 620 — is a smart play at this point. That strategy may not get you or I to switch platforms, but it could rack up sales through first-timers.

Whether you currently own a smartphone or still have an old feature phone, I’d be curious to hear your thoughts: What will it take for you to switch to or initially start with Windows Phone 8 or BlackBerry 10?

From what we can see — and assuming the video is not fake, which I don’t believe it is — the phone dismisses any hardware buttons on the front of the device. Some navigation gestures appear to start from off of the phone screen, much like the gestures used on RIM’s BlackBerry Playbook tablet.

The video also shows the new platform’s ability to multitask and seamlessly find all communications for any particular contact, something that RIM is likely to point out as a key strength compared to other platforms. Additionally, there’s a glimpse of the apps that may first appear on the operating system: Foursquare, FaceBook, Twitter and LinkedIn all make an appearance.

One aspect that surprises me are the two ports on the side of this alleged BlackBerry phone. These would be used for charging the device and connecting it to any external data or video source: think computer or monitor. Any dock for this design would require the phone to be in landscape mode, which isn’t a problem, but is generally different than other handsets. We’ll find out more about those, and other aspects of the new handset line, in January when RIM reveals all.

The new feature should be especially useful in areas with high wireless network concentration and in regions where voice calling minutes are still expensive. While handy in the U.S., for example, voice over Wi-Fi is likely to appeal in areas where the BlackBerry brand is still strong: Emerging markets that don’t yet have cheap voice minutes over cellular or are limited by cellular network coverage.

A video demonstration made by Research In Motion illustrates the seamless experience of starting a voice call from a message thread. One button tap initiates the call, keeping the message stream open for IMs or photo sharing.

[youtube=http://www.youtube.com/watch?v=3Mf1KSELfQg&hd=1]

Research In Motion says the updated BBM 7 client is supported on handsets running the BlackBerry 6 OS software now, with anticipated support for older devices running BB 5 OS early next year.